EU–Mercosur Trade Deal to Take Provisional Effect May 1 After Formal Notifications

Overview

• The Brazilian government said Tuesday that Brazil notified the European Commission on March 18 and the EU notified Brazil on March 24, setting May 1 for the deal’s provisional start.
• The provisional phase will apply only between the EU and Mercosur members that finished domestic steps, which now include Brazil, Argentina and Uruguay, with Paraguay expected to notify next.
• In Brazil, the presidential decree that incorporates the treaty into national law is in advanced processing but has not yet been published.
• The European Parliament referred the agreement to the EU Court of Justice for legal review, which could slow full entry into force, and France’s agriculture minister warned she may take unilateral steps to protect farmers.
• The pact will phase out tariffs on most trade, covering 91% of goods imported by Mercosur and 95% by the EU, and Brazil’s industry ministry projects a modest boost of about 0.34% to GDP along with higher trade and investment.